SF Bay Area Indymedia indymedia
About Contact Subscribe Calendar Publish Print Donate

California | Indymedia

Pacifica’s long-awaited audit shows where the money goes
by SaveKPFA.org
Friday Jul 20th, 2012 10:16 PM
Pacifica’s audited financial statements have finally been released and raise “substantial doubt” that Pacifica can continue as a “going concern” without making changes in the way it operates. The audit shows that of the network’s five stations, KPFA is the wealthiest, with net assets of $3.2 million. KPFK in Los Angeles is the only other station in the black. The rest are underwater. Worst of all is WBAI in New York, which has been operating under Pacifica-installed management for nearly four years. WBAI has a current net worth of NEGATIVE $3.3 million — with a deficit of $750,000 in 2011 alone.
Pacifica’s audited financial statements for the years ending September 2010 and 2011 have finally been released. You can download the reports at Pacifica’s website (http://pacifica.org/finance_forms.php). The independent auditor raises “substantial doubt” that Pacifica can continue as a “going concern” without making changes in the way it operates.

The audit shows that of the network’s five stations, KPFA is the wealthiest, with net assets of $3.2 million. KPFK in Los Angeles is the only other station in the black. The rest are underwater. Worst of all is WBAI in New York, which has been operating under Pacifica-installed management for nearly four years. WBAI has a current net worth of NEGATIVE $3.3 million — with a deficit of $750,000 in 2011 alone.

You can also see from these audits that Pacifica’s National Office raises very little of its own funds. The lion’s share of Pacifica’s budget — $2,001,298 – comes from imposing a “levy” on the 5 stations (KPFA, KPFK, KPFT, WPFW and WBAI), of which KPFA pays roughly one quarter.

Where’d Pacifica’s $2 million go? The National Office doesn’t produce any programming of its own, but it carries personnel costs of about $1.1 million — mostly in management-level salaries. And it’s been spending increasing amounts on “legal fees.” In 2010, legal fees came to $328,433. In 2011, they grew to an astonishing $538,417. Some of it has been spent on expensive lawyers fighting legal actions sparked by Pacifica’s heavy-handed tactics at its member stations. In addition, SaveKPFA’s review of legal bills reveals that Pacifica has paid attorneys up to $500 per hour to come up with legal strategies for obstructing the KPFA recall election currently underway, and blocking dissident board members’ legal right to inspect records (such as legal bills).

Since 1999, the costs of supporting Pacifica’s national bureaucracy has grown from 9% to 20% of the network’s total income. To give some perspective, the National Office’s budget is twice the size of either KPFT or WPFW, and it’s nearly the same size as each of the other three stations (KPFA, KPFK and WBAI). Pacifica was meant to be a coordinating body to provide support and reduce costs, but it has become the opposite of that. It produces no radio programs, but spends huge sums on executive salaries and costly, unproductive board meetings. KPFA could operate much more easily if it did not have to pay 20% of its listener contributions to Pacifica.

PLEASE JOIN US AT THE BOARD MEETING SATURDAY AFTERNOON, 7/21 — that’s when we expect the board to have open sessions and take public comment. Come then and you’ll meet up with KPFA staffers like Letters and Politics host Mitch Jeserich, Against the Grain co-host Sasha Lilley, KPFA News anchor John Hamilton, and many other SaveKPFA supporters who will be at the meeting.





by Virginia Browning
Saturday Jul 21st, 2012 2:04 PM
QUESTIONS AND ANSWERS Brought to Mind by the Spin :

SPIN BY “SaveKpfa”:
“Pacifica’s audited financial statements have finally been released and raise ‘substantial doubt’ that Pacifica can continue as a ‘going concern’ without making changes in the way it operates.“

QUESTIONS AND ANSWERS Brought to Mind by the Spin as well as by the audit :

QUESTION: How can an auditor NOT be doing a simple neutral audit short of "cooking the books"? Isn’t an audit simply a neutral statement of reality?

ANSWER: Pacifica is and has been in dire straits for many years, both before and after the 1999 proposals to move the network right-ward or even sell a station. In 2008, then young and new-to-Pacifica Brian Edwards-Tiekert, in his usual extremely persuasive manner as a member of Pacifica’s National Finance Committee, urged drastic, potentially-crippling cuts at Pacifica, but locally at KPFA supporting continued loading on of paid staff and consultants.

The audit just released now could have observed that revenue was raised within the past year network-wide by over $800,000, costs were cut network-wide by $800,000 and financial results were 75% better in 2011 than in 2010 and removed a "not a going concern" label that was slapped on the foundation in 2010. (The 2008-2009 auditor declined to make that assignation). The auditor did not choose to do so, admitting that things improved, but adding a grim "but not enough" kind of statement,

Some now question the neutrality of the auditor in implying that current Pacifica national management is to blame for financial problems that were largely set in motion several years ago. Those who knew the history of this particular auditor in working in league with the disinformers had urged using a different auditor, and now some newer members of the Pacifica National Board wish they had listened to their “elders” there.

SPIN:
"The audit shows that of the network’s five stations, KPFA is the wealthiest, with net assets of $3.2 million. KPFK in Los Angeles is the only other station in the black. The rest are underwater. Worst of all is WBAI in New York, which has been operating under Pacifica-installed management for nearly four years. WBAI has a current net worth of NEGATIVE $3.3 million — with a deficit of $750,000 in 2011 alone."

QUESTION: Looking at the audit, I noticed the millions in assets shown for KPFA (in contrast to the millions deficit of WBAI) are mostly under property, equipment and something called "inter-division receivables.”

ANSWER: Pacifica – NOT KPFA – owns 2 buildings in Berkeley. Unfortunately, New York’s WBAI must operate from a rented space not owned by the network. Yes, they need to move, and not unlike the disinformers at KPFA, some at WBAI have, with the support of “SAVEKPFA” allies on the national board, strongly resisted making the move in a time that would have been easier than it will now be. Yes, some other than SAVE KPFA also were not able to make this New York move happen in time, but this has been much much more complicated than the spin leads one to believe. Pacifica listeners nationwide though mostly in the Bay Area raised money in the 90s for the building that houses both Pacifica and KPFA to strengthen a Progressive 5-Station Pacifica network with its many-station-affiliates, not for only one of its sister-stations to claim as their own. (One could just as well ask "why doesn't KPFA pay market rent for ITS space in Pacifica's building as she could ask the riling-up questions Save K. asks.) As for the “ interdivision receivables” in the audit report which Save KPFA uses to claim Pacifica owes it money --these are the expenses for security guards and attorneys incurred by the old Pacifica board in 1999 during the KPFA lockout that had to be paid. They are over a decade old and should have been written off some time ago. They have nothing to do with KPFA's current financial position, though “SAVE KPFA” confuses listeners by continuing to pretend that somehow the rest of the network “owes” KPFA for having been in a position then to eventually pay more for this destruction of the network.

SPIN: You can also see from these audits that Pacifica’s National Office raises very little of its own funds. The lion’s share of Pacifica’s budget — $2,001,298 – comes from imposing a “levy” on the 5 stations (KPFA, KPFK, KPFT, WPFW and WBAI), of which KPFA pays roughly one quarter.”

ANSWER: This “levy” pays for insurance, transmission, overhead, Free Speech Radio News, and Democracy now, in addition to a bare-bones management legally required for the network to exist. KPFA would have these same expenses without Pacifica. If such an arrangement is even possible. SAVE KPFA’s Dan Siegel admitted in the July KPFA Local Station Board (governing body) meeting, that managers are paid so little at Pacifica we’re lucky we have any. Woops Dan – it’s on a recorded archive! They’re careful not to put their foots in their mouths too often publicly, but we have a few other instances as well…Listeners need to rely on other-than-naive famous endorsers and spin.

SPIN: "Where’d Pacifica’s $2 million go? The National Office doesn’t produce any programming of its own, but it carries personnel costs of about $1.1 million — mostly in management-level salaries. And it’s been spending increasing amounts on “legal fees.” In 2010, legal fees came to $328,433. In 2011, they grew to an astonishing $538,417. Some of it has been spent on expensive lawyers fighting legal actions sparked by Pacifica’s heavy-handed tactics at its member stations. In addition, SaveKPFA’s review of legal bills reveals that Pacifica has paid attorneys up to $500 per hour to come up with legal strategies for obstructing the KPFA recall election currently underway, and blocking dissident board members’ legal right to inspect records (such as legal bills)."


ANSWER: See above: “doesn’t produce programming” is not quite the case. In addition to Democracy Now and Free Speech Radio News, the whole network contributes money for Pacifica’s inter-station shows such as Letters and Politics, Flashpoints, the Pacifica news shows, and others.

As to management level salaries, see above Dan Siegel’s recent remark about management costs being extremely low at Pacifica.

Legal costs? Most of these costs were wracked up by failed suits filed by Save KPFA allies.

I need to get to the Pacifica Board meeting – more later.
Stay tuned and, has KPFA/Pacifica not tried to ask you – don’t simply believe the spin, do the hard work of finding out yourself.

http://www.stopthekpfarecall.org , http://danielborgstrom.com
by MBA listener
Saturday Jul 21st, 2012 10:03 PM
Virginia - you're confused. You must know that Pacifica produces no programming of its own. You must also know that WBAI is in a huge hole because of Pacifica's irresponsible management this last 4 years: it's $3.2 million in debt and dragging the whole network down. Why are we all being forced to pay for Tracy & Arlene's mistakes?

Pacifica is also way WAY WAAAAAY behind in its payments for outside programming, Democracy Now! and FSRN. Over $1 million behind! You can find Amy Goodman and Juan Gonzalez (and SaveKPFA) urging listeners to donate to FSRN so it doesn't go under here:

http://www.savekpfa.org/save-free-speech-radio-news

Very nice of Amy and Juan to do, since they are also owned a ton of money by Pacifica.

No, Pacifica's $2 million budget goes to these items, as shown in the audit: over 50% to salaries -- mostly management like CEO Arlene Engelhardt and CFO LaVarn Williams -- that is, the ones who are mismanaging our historic network's resources. Another 25% plus goes to "legal fees" which is Pacifica fighting its own listeners and staff. And the rest (less than 25%) to various incidentals.

It's disgusting.

READ THE AUDIT, done by an independent firm, or for a short overview see:
http://www.savekpfa.org/pacificas-long-awaited-audit-shows-where-the-money-goes


by Virginia
Sunday Jul 22nd, 2012 1:16 AM
Every point you "make" is answered in what I wrote. There are several Pacifica-station programs heard on more than one station, and whose listeners in each signal area contribute to the shows. So, for example, that misleading chart you put out today neglects to mention that some of those shows receive money from more than the bay area or even the bay area plus Fresno.

And one great thing is the little soundbyte I downloaded from the July Local Station Board meeting of your often-insinuating-himself-into-progressive-hearts as he moves organizations rightward Dan Siegel railing about how little we at Pacifica pay management. So get your story straight on that, anonymous disinformer.